It’s never fun bringing bad news, but we’ve got problems right now. Things aren’t looking any better for our local economy. Sure, the downtown mall rebricking is complete and under-budget, but between unemployment rates, general business activity, a slow real estate market, mall vacancies and increases in welfare recipients, our recession looks like it’s getting worse, not better in the near term. I talk about each in detail after the break…
Horrible Unemployment Rates: Currently unemployment stands at 5.5% in the Charlottesville area in April, a level which hasn’t been seen since 1992. Even though unemployment declined 0.1% since March, this can be explained by a smaller number of people looking for work or a reduction the labor force.
Welfare Recipients Rise 10%: While I couldn’t find information about Charlottesville area welfare, I did find some reports on how welfare payments, referred to as Temporary Assistance for Needy Families (TANF), has increased by over 10% since the same period last year in Virginia. That’s a lot of money considering these payments total nearly $10 million every month.
Real Estate is Moderate, but Driven by Government Incentives: We’re going to leave the Real Estate analysis to our local housing economist, Jim Duncan, but things look ok in real estate. It looks like sellers who have decided to set realistic price expectations can sell houses, but then again they’ve got really low interest rates and $8,000 in free cash from the government.
General Business Climate is Poor: With new restaurant and shop closings everyday, fewer new jobs available (really, what is available besides technology jobs and part-time stuff?), quiet shopping centers, nervous small business owners, and furloughed employees, things have yet to turn around. We haven’t had a major bankruptcy hit Charlottesville, but with the Chrysler branch closure, it sure isn’t that far from our thoughts.
When will things turn around? What signs should we look for?
[read more on national welfare trends] [spicybear/flickr photo]
Related posts:
- Recession’s First Major Layoffs Hit Charlottesville: 17th Largest Employer Furloughs 300 Employees
- Sign of Our Times Part 7: Unemployment Rates Rising and Charlottesville Budget Problems
- Charlottesville Real Estate Ready to Hurt?
Reaching the highest unemployment rate since 1992 is bad, but 5.5% is considerably better than the national average which is around 9.5% and the unemployment rate in Washington DC which is around 10.5%.
agree.
echo! hellooo
Hey
so i am moving to the dupont area from cville….. job hunting… moving this weekend. any recommendations?
NoVA-area jobs in gonvernment sub-contracting, by telecommute from DuPont.
um yeah… you are talking to passionate art/design freak… besides dont one need a govt clearance?
Government jobs. Department of Energy, Department of Transportation and Department of Defense are all hiring. Those are just the ones I know of. Mediocre pay, excellent benefits and probably the best schedule and least amount of stress you could ever find.
eh…
you sound more non-profit
And here I thought all of my unemployed friends were just lazy.
couple grotesqueries.
article in Newsweek said that 52% of U.S. companies are either in hiring-freeze (LEXIS, e.g. locally) or mandated to hire only internal candidates and not back-fill vacated positions except in extreme demonstrable need (UVA, e.g. locally).
re-employment seminar last week in Cville. 16 attendees, only one of those blue-collar (22 year-old plumber). 15 others each white-collar, formerly averaging between 50 and 80K annual salary, most with 15+ years experience: banking, tech-writing, management, manufacturing technology, IT.
That sounds miserable.Did you all go down the pub and get shitfaced together afterwards?
we were all fucking broke.
Do I need to send you $5 a week in the mail?
you sweetie. i’m fine. i’ve been selling my stamps back to the post-office and flaying/packaging roadkill as exotic-game dishes for local high-end eateries. Try the emu this week, it’s fresh.
It might not be humane, but it’ll be fresh,and you can even argue that the bird deserved to die.
oh now you gotta tell the story about how the emu tried to kill you
Sure emu can be annoying but ostriches are the real flightless bird bad asses.
@dieter: Actually, that would be the cassowary. Ostriches are down right friendly compared to those blokes.
I want my damn unicorn.
This past week I spent some time talking with people from the West Coast. At 5.5% we may be higher than “our” average but compared to other areas we are in pretty good shape.
Until California legalizes and taxes weed, they are doomed. It has always been my plan to return after a natural or economic disaster. I love it when a plan comes together.
Buy real estate in NV or AZ and wait for California to drop into the Pacific. Instant waterfront property.
Yeah, but they will still be AZ or NV, which… how shall I say this, suck.
How succinct!
the chart says enemployment. i want all members of the chart committee in my office in five minutes. i’ll give you a hint: you’re fired.
I think it is an abbreviation for enema-employment.
According to this chart, I am high on hallucinogens and can now see the molecular structure of matter, which apparently is just energy condensed to a slow vibration.
/members of the chart community know how to party…
seriously, that is a magnificent chart.
We are all one consciousness, experiencing ourselves subjectively. There’s no such thing as death, life is just a dream, and we’re the imagination of ourselves.
And now here’s Tom with the weather…
we are all subjects, experiencing Tom’s weather objectively. There are no such things as dreams, which as reifications have no substantive reality or instantiation in the discernable present and concrete world, life is real, and demonstrable, but not so much as death which defines life by providing verification for it as a final and ‘fixed’ state.
meanwhile, in Lansing, Michigan, here’s a grey-squirrel that the Brownsteins have taught to ‘hang ten’ on a cute miniature surfboard towed behind a toy-boat.
I read that and actually looked into my cup of tea to see if I could see the dissolving residue of a hallucinogenic tab that someone had dropped into it.
oh shit we should have taught our squirrel to do that
to write like kierkegaard-by-way-of-BretEastonEllis, or to check for drugs in its tea?
i have SEEN surfing squirrels. I also have a handful here, and chipmunks (a combined/menagerie of Wave-Riding). you are welcome to as many as you like: they are all very tame, as I am virtually St. Francis in my relationship with them.
i miss Darren Hoyt and his Turtle-with-Frog-Spider Hat. Can we incite him to further oddities?
damn the chart makers.
As long as there are poor people in cville, I’ll have a job.
….what a weird, fucked up existence I lead.
Time for a drink or seven.
buh-bye
Every time I have a bad day and bitch about my sales being off, I just remember how shit-holed the rest of the country is compared to our slice of piedmont and I feel better.
This, however, does NOT prevent me from hating my existence and wishing death upon some of the upstarts that cross my lease line. Boost Mobile payment, my ass. You’re hear to see me weep tears of utter defeat.
It’s 16.5% in Bend Oregon so count your blessings, beloved naval gazers.
If you choose to live in a place called Bend, you don’t deserve a job. Aren’t they all pipe-bomb making anarchists over there anyway?
Nope, they are snowboarders, fly fishermen, back country hikers, serious pot smokers, software developers, retirees from California and unemployed builders, etc. It is sunny 300 days a year, cheaper than Charlottesville to live in, high desert, lots of Ponderosa pines and lava formations, and a half dozen 9000 foot high volcanos in various states of activity. You can ski into July.
It was pretty nice until all the Californians showed up with their cashed out home equity, attitudes and $350 sunglasses. Now they are all attending re-employment seminars and apologizing for wrecking the place.
Now, where have I heard that one before???
/looking at you, New York
Catholics by the sound of it.
until all the Californians showed up
Was almost one of those myself. Final two destinations were virginia and oregon. Virginians, whilst grumbling about yankees, did not seem to mind, nor did they have a word for, western invaders. Oregon on the other hand, wouldn’t call you anything – they would just quietly slash your tires.
So I picked virginia.
Oh, that sounds like my kind of place. Except… no. I’ll pass. I prefer haughty East-Coasters any day. We’re genetically superior, you see… We sweat arrogance and self-absorbedness.
That’s it. I’m moving to Toad Suck
Things look OK in real estate? You’re relying on a real estate salesman to tell us this?! We love Jim, and he’s a frequent commenter on our blog, but for anybody to call things “OK” is a euphemism. :0)
The price of real estate has far outstripped local salaries. Real estate sales are down significantly over 2008, which were down over 2007, which were down over 2006…and yet, prices remain cuckoo. There’s far more inventory than qualified buyers, at every price point.
Anybody who lives here and is fantasizing about staying should know that right now Gen Y is essentially priced out of the market, possibly for years:
http://realcville.blogspot.com/2009/04/charlottesville-albemarle-real-estate.html
It’s cheaper to rent–and we all know how expensive it is to rent.
And here’s the Virginia Housing Development Authority on the future of this housing market, including a “correction” in 2010 (they’ll probably revise that to 2011 or 12 soon, fwiw):
http://www.scribd.com/doc/13671313/CAAR-Conference-VHDA-Economic-outlook
Right now it’s summer, so things are selling. But for May contracts that actually closed (as opposed to contracts that are pending, or contingent (must meet a condition to complete sale) for single family homes, the City was down 45% over May 2008 and the County was down 24% over May 2008. (The entire 5 county area was down. All of Central VA was down.)
This won’t be a realistic or healthy market until the people who would like to like in/near downtown–for instance, Cvillain reader types–are no longer paying $200K for an 800 sq ft. cottage in Belmont. (Ask Belmont Yo what he paid!)
Then again, this may never be a realistic market….
thanks real cville. i defer to you for real estate expertise.
I remember reading somewhere that there were like 3500 unsold homes/condos on the market in City/Albemarle County as of late spring. That’s a real estate coma for a community this size. There are three beautiful homes with Blue Ridge views on my street sitting vacant, with crews mowing their lawns every week. You’d need an amazing surge of activity to liquidate that inventory to the point where people are building things again. You have got some lunatic building more condos or apartments in that hideous development behind Pantops, and I see a few faux townhomes here and there, but that’s about it. For bigger places, people are finally capitulating and setting prices back to like 2003 levels, which were still not exactly bargains. But I’ve got friends who have had contracts on their places that just went up in smoke when their buyers could not get it up. We’re not even close to a housing recovery yet. . .
Ask Belmont Yo what he paid!
2001: $90k for a 20’s duplex on three lots. Needed(s) a lot of work (the food in the fridge conveyed!), but still.
/good times…
What does this mean?
“This won’t be a realistic or healthy market until the people who would like to like in/near downtown–for instance, Cvillain reader types–are no longer paying $200K for an 800 sq ft. cottage in Belmont.”
A guess at the meaning – The real estate market will be healthier if Cvillain reader types start paying less – for cottages for sale – in Belmont?
If so, how does that work?
Genuinely curious for the real estate experts meaning here. Thanks.
Doesn’t negate the larger issue but…
Patience can still (sometimes…perhaps even rarely) pay off. Last year I bought a small (and I mean small- 600 sq. ft.) 1920 cottage 3 blocks off the downtown mall on an absolutely great street for 135K. It’s perfect for my needs and it’s cheap. It took a lot of looking and a lot of patience, but I was willing to do whatever possible to remain living w/in my means.
This is all just a natural correction. Natures way of bringing salaries and spending back to earth. A lot of people have been making 60-80k a year in “managment” positions which means they read the paper and surfed the net about half the time. Automation has finally caught up with us. Most jobs are easier than in the past. Look at the grocery store, nobody in a major store is putting price stickers on every box anymore. The cashiers don’t even need to know how to count change. Cashiers simply scan the item and the computer reorders the stock.
The point is that people have been coasting and now that the bottom line has to be accounted for it will take some time for it to shake out.
Things will get better when people and especially government learn to live within their means instead of buying everything in sight and then trying to pay for it later.
@truman coyote…that number (which is now higher) refers to all of Central VA. In Cville and Albemarle there are currently 1350+ properties of all types on the market, and more added every day. Each time there’s a sale of anything, more properties replace it. You’re right that the numbers are far too high for the City/County as well as the region. Plus, there are potential sellers who are pulling their properties off the market, waiting for it to “turn” better again…and there are bank owned properties that haven’t been offered for sale.
Anybody can check listings at mycaar.com Click on “new listings” for each day’s new listings, or “Property” to select area/price range/kind of house etc.
@xelor, Yes. A “fixer upper” on Hartman’s Mill Rd just came on the market today…$85K. Patience may very well be rewarded in this market.
@torque converter: Well said!
@Michaux Hood,
It may not be “healthy” for the seller, esp. if s/he overpaid in the last several years. But a house is a place to live–it should NOT be considered an investment nowadays, and often not even an asset (IOHO and that of many actual experts). Historic housing appreciation, except during bubbles (this being the worst one ever) was 1% annually plus 1-2% for inflation.
The historic price-to-income ratio was 2.5; in Cville it is closer to 5.5. Too much $ is expected to go toward housing…though banks have much stricter lending rules these days, which is why sales are slow.
Let’s say you get a mortgage for a $200K cottage in Belmont. Some at this price point are fixer-uppers, some are gems; if you get a fixer-upper, you then have to add in improvement costs. For a house at this price point, you’d want an FHA loan, ideally–available thru UVA Credit Union, so you only put down 3.5% of the cost. Still, your mortgage will be $1600.00+ a month, which includes insurance and annual property taxes. So you have your down payment of about $8K,plus several thou in closing costs, and whatever you pay a real estate agent.
If you make $40K a year, you should be spending just over $900 a month on a mortgage, and about $1200 TOTAL per month for credit responsibilities, which include that mortgage plus car payments, credit cards, student loans.
If you make $50K a year, mortgage should be $1167 and for all debt up to $1500.
In either case, you can’t afford the little cottage.
Yup, we know a couple Gen Y’s who make more than this, or who are married w/two incomes. But if you buy the cottage and want the kid? You’ll have to move. To recoup down and closing costs, the home will have to appreciate…and will it?
In many many real estate markets, some within an hour of here, $200K gets a house you can live in for the next 30 years with four of your own spawn. But then you’re not in Nirvana, right?
For more on how much house you can afford, see “How Much House Can You Buy” at Bankrate.com
http://www.bankrate.com/finance/mortgages/how-much-house-can-you-buy–1.aspx
All this being said, prices ARE coming down in the area. How much down remains to be seen. To use Belmont as an example again: Some of last year’s asking prices in Belmont were at the half million mark; this year, the properties in the mid-3’s and under are selling…those that are higher just don’t sell (we have an upcoming post on this) The market is still expensive, but less expensive than before. (That line sounds like what the pundits are saying about the national economy…it’s still bad and will be for a while, but not as horribly bad as it was just a few months ago….)
A buyer doesn’t pay a cent to a real estate agent.The commission for both sides of the transaction is paid by the seller. If you are going to come on here acting all expert, at least get your basic facts correct.FFS.
I hear and appreciate your explaination of wise investment in real estate, but having read through that, I still don’t get the intended meaning of the specific statement that I quoted.
There are different schools of thought. One is that the real estate will recover when the economy recovers. Another is that the economy will recover when real estate recovers. I am in the second camp. The reasons are this: Owning real estate creates confidence and commitment. It cause people to think about financial stability and responsibility. they “feel” that they have something that is theirs that is worth working for. These feelings cause people to try and make more money which flows into the economy. This does not mean owners are better or worse than renters they just tend to have a “different” mindset once they are owners.
In the long run the population increase will cause supply and demand to strike a closer imbalance (in the favor of the sellers). The other factor that will stabilize home prices is simply the overhead cost of builing a new home. With all of the building codes and hi tech materials the cost has risen significantly for many non traditional materials. It currently costs approx $100 per square foot to build an average house excluding the land. So if you want an 1800 square foot home *(typical 3 bed 2.5 bath vinyl sided ranch) and pay 50K for a lot and permits then you have a minimum of 230k. Most lots in the city are at least 100k and most people spend more like $125 per ft to build. So you are really talking about $325k for a typical ranch house.
The real reason to buy a house is to hedge home costs as you age. If you buy a 300k house at age 35 and your payment is 2000 a month and your income is 75k, your housing costs are 1/3 of your gross. 15 years later at age 50 your income will hopefully have doubled and your payment will become 1/6 of your income and you will have built some equity for retirement. If you still owe 200k at this point you can refinance the 200k and lower your payment to 1500 a month or 1/10 of your gross income.
Buying a home in these times may be scary and tough but there will be a lot of people who wished they had ten years from now.
By the way I am not a real estate agent or builder, just someone who has been around a long time.
“just someone who has been around a long time.”
should we expect you to be around HERE a long time?
I escaping Cville and moving to DC… (actually in the City) i think i have applied to 50 jobs by now… ha…. and NOTHING! i have a college degree and major computer skills…. I followed up on a few… people have responded with… we over 700 applicants….
700 APPLICANTS!!!
I feel your pain. I have applied to a few local companies and no answer…so I applied to some out-of-town companies. I have a job interview in Richmond tonight.
it’s actually called The District, not the City. The City is New York.
good luck either way. Just thought I’d save you some looks from the locals.
oh and good luck finding an affordable place.
ha thanks…note the district.
have a place in dupont….
its such shame… some companies don’t even acknowledge your resume….soemtimes you don’t even know if they received it!
And you wait and wait..maybe three months…. no word..sometimes they call out of blue. companies use to atleast inform you that the job has been filled. the stresss!
Quite a few of my friends have migrated to the DC area for jobs. Say hi to echo!
I thought echo left because of the incident with the reticulated python and the lady-boy from Craigslist?
Yeah Floozy. That and the job. After the python/lady-boy incident, I really needed to get out of Cville. You know, let the dust settle. Hope the cops forget about the whole thing.
shen- what career field are you in??? I will never say– what do u do for a living (unless your an artist) i would hang myself if i used that.
Bilingual (French-English) customer service
well if you end up making some money, dupont is a good place to spend it. Cafe Citron has excellent mojitos. I know mojitos are-so-three-summers-ago, but whatev.
oh.. considered moving to france?
noo… i looovey mojitos and juleps… thats really close to P street. the sugar daddy has money…not me..hence dupont… otherwise i’d be living in an artistically crafted and colored shack infront of the white house.
escafe in cville also has great ones…
yeah I was wondering how you were able to live in Dupont….
sugar daddy answers it.
I’d move to France if I had a sugar daddy
join e-harmony!! haha
who the heck makes $75,000 a year?